ACT Childcare Provider Compliance

The Canberra Times recently carried a report on Canberra childcare services' compliance with the National Law and Regulations.

DPP v Kuol: Child Care Benefit Fraud

This is another criminal case heard by the Victorian County Court in relation to Commonwealth Child Care Benefit fraud. This case concerned a Family Day Care Educator, Martha Anne Kuol who pleaded guilty to one charge of dishonesty causing loss to a Commonwealth entity contrary to section 135.1(3), Criminal Code (Cth). The charge related to submitting false time sheets to five different Family Day Care (FDC) providers: Nyier FDC, Manhal FDC, White Butterfly FDC, Favour FDC and Dorsy's FDC.

As outlined by the court, the Department of Education and Training identified a group of FDC providers as the Deng Group who were involved in fraudulent activity. Rosa Riak was the mother of Kuol Deng and Achai Deng. These three people conducted the Deng Group FDC Provider businesses. Martha Kuoli is one of nine educators who have been charged with child care benefit fraud in the Deng Group as a result of an Australian Federal Police investigation. At the time of the sentencing of Martha Kuol only one of the other eight educators, Adiol Dahl, was sentenced (see previous blog post).

The court indicated that the total amount paid out by the Department of Education and Training for claims submitted in relation to Martha Kuol for the period 8 June 2015 to 16 December 2015, was $291,539.87. Martha Kuol accepted that a total of $119,657.54 was dishonesty received by her for childcare services that she did not provide. Also, according to the court, she obtained these payments by charging excessive hours, overlapping and inconsistent claims and submitting false claims and time sheets. This was done in complicity with members of the Deng Group.  In her claims, through the Deng Group specifically, she received a total of $215,000 for the period June and December 2015.

The court sentenced Martha Kuol to a term of 12 months' imprisonment. However, this was suspended on her entering a recognisance of $2000 and on condition of her being of good behaviour for two years. 

In relation to child care benefit fraud in general, the Herald Sun recently carried a story.

Busy Kids Cranbrook Kindergarten and Child Care Centre Closure

The Townsville Bulletin and ABC Online had reports on the closure of this service (see previous blog post).

BKE Pty Ltd v Department of Education and Training - Suspension of Service Approval

This case concerned an application to the Queensland Civil and Administrative Tribunal (QCAT) from the approved provider (BKE Pty Ltd) for a review of the decision of the Queensland Regulator under the National Law (Department of Education and Training) to suspend service approval for Busy Kids Cranbrook Kindergarten and Child Care Centre. The suspension was originally stayed by the Tribunal.

The Department issued a show cause notice for cancellation under section 78, following a number of breaches of the National Law and Regulations. Some of these breaches resulted in the issue of a show cause notice for suspension and a Compliance Direction. Full details of the compliance history of the service is outlined in the decision. After considering the approved provider's response to the show cause notice, the Department decided to suspend service approval for three months instead (see section 79). 

At the hearing, the approved provider admitted to the breaches but argued that "...where historical breaches notified by the Department had been remedied, or taken into account in the course of the Department previously reaching a decision not to cancel or suspend BKE’s service approval, they could not later be taken into account when again considering cancellation or suspension. Alternatively, BKE submitted that the breaches, if they could be taken into account, did not individually or collectively warrant suspension." (para.15). QCAT rejected the first argument saying that the decision maker in exercising its discretion to suspend or cancel can take into account past breaches:

The propensity of a service provider to not fulfil its obligations to maintain a safe environment for children would, in my view, be a relevant factor for the exercise of the discretion. It is also relevant in determining whether the threshold conditions for the exercise of the power are satisfied. That propensity may be revealed by a continuing failure to proactively comply, notwithstanding that a provider may have remedied breaches in a reactive way as they were brought to attention. (para.20).

The Tribunal then examined the breaches that had occurred to see if suspension was appropriate and concluded:

A decision to suspend a service approval involves: (1) determining whether the power is enlivened; and, if so, (2) deciding whether as a matter of discretion it should be exercised.
It is clear that if, as I have decided, it is appropriate to consider earlier breaches, the suspension power is enlivened by the acknowledged breaches of the National Law: s 70(e).
Taking into account matters outlined in the discussion below in relation to the exercise of the discretion, I would in any case also conclude that it would not be in the interests of children being educated and cared for by the service for the service to continue (s 70(a)). I would also conclude that the s 51(1) implied condition of the approval – the service being operated in a way that “ensures the safety, health and wellbeing of children being educated and cared for by the service” - has not been complied with (s 70(b)) (paras. 79-81).

One of the major reasons for QCAT in supporting the Department's decision to suspend was the number of previous and current breaches as well as the attitude of the approved provider:

Having regard to the further issues identified at the monitoring visit after the service recommenced operations and the recurring nature of the non-compliance, and notwithstanding Ms King’s long history in the industry, I cannot be satisfied that BKE is committed to ensuring compliance with the requirements of the National Law and Regulations. Bearing in mind the two show cause notices and various compliance directions and advice already issued to BKE, one might reasonably ask what else, short of suspension, the Department as the regulatory authority, and the Tribunal in its place on review, could reasonably do to ensure BKE’s compliance with its legal obligations? (para.97).

Victorian Multiethnic Slavic Welfare Association Inc (in liq) & Anor v Trajkov & Anor

ABC Online recently carried a report of a court case in which the Victoria Multiethnic Slavic Welfare Association Inc (in liquidation), operators of a childcare centre in Lalor, sued its President, Boris Trajkov, for using Association funds for personal purposes. You can see the full County Court judgement here.

Profitability of Childcare Services

ABC Online recently published an article by a childcare consultant in relation to the profitability of childcare services and childcare fees.

2017 Annual Early Learning & Childcare Services Survey

The Australian Childcare Alliance NSW (the industry body for owners and operators in NSW) recently conducted a survey on the impact of the National Quality Framework on providers. A summary of selected results was published in a media release. Further information was also published on their website but unfortunately the results of the complete survey do not seem to have been made available.

More on Sleep and Rest Practices in Childcare Services

An article on The Conversation, by Queensland academics, provides a comment on the recent National Regulation changes requiring policies on sleep and rest for children (regulation 168(2)(a)(v)).

Proceeds of Crime Orders Made in Childcare Benefit Fraud Case

In the NSW Supreme Court Case of Application of the Commissioner of the Australian Federal Police; In the matter of Lami, the Australian Federal Police (AFP) sought a restraining order to preserve property (certain bank accounts held by Smart Care Solutions Pty Ltd) pending the making of a forfeiture order under the Proceeds of Crime Act 2002 (Cwlth). The application related to criminal charges brought against Ms Zahraa Saadi Majeed Lami (sole director of IGrow Family Day Care Pty Ltd) in relation to fraudulently claiming child care benefit from the Commonwealth Government. On 4 August 2017, Ms Lami was charged with two counts of obtaining a financial advantage by deception (section 134(2), Criminal Code Act 1995 (Cwlth) and one count of intentionally dealing in proceeds of crime, being money in excess of $1,000,000 under (section 400.3(1) of the Criminal Code). 

The court granted the restraining order. In addition to making of the order, the Court directed Ms Lami to provide to the AFP within 28 days a sworn statement, setting out:

• all of her interests in property valued at AUD5.000 or more;
• all of her liabilities valued at AUD5,000 or more.

Relationship Between Working With Children Check Requirements and National Law

Different criteria apply to whether a person can obtain a working with children check and whether they can work in or operate an education and care service. This was demonstrated in a recent case before the Queensland Civil and Administrative Tribunal: NPJ v Director-General, Department of Justice and Attorney-General. In that case the Tribunal considered whether NPJ should  be allowed to retain their Blue Card (Queensland working with children check).  Initially, compliance action (issue of Prohibition Notice under section 182) was taken, under the National Law, by the Queensland Regulatory Authority (under the National Law) against NPJ as they were deemed an unacceptable risk to children (they had left children unsupervised on a couple of occasions). Subsequently, the Prohibition Notice was withdrawn and NPJ was allowed to care for children on the basis of an enforceable undertaking under section 180 (note the bodies issuing working with children checks and those regulating childcare are different bodies). 

However, despite the Regulatory Authority no longer deeming NPJ to be a risk to children, the Tribunal upheld the previous decision to revoke the Blue Card: 

There is a clear difference between the test which is applied when determining whether a Prohibition Notice should be cancelled under the National Law and the test to be applied under the Working with Children (Risk Management and Screening) Act 2000 when deciding whether an “exceptional case” exists.

The Tribunal has previously rejected the argument that principles brought across from the family law jurisdiction involving “an unacceptable risk of harm” should be resorted to in order to interpret what is meant by the phrase “exceptional case”

The Prohibition Notice was the catalyst for these proceedings. Without that notice, the Tribunal may never have been aware of the Applicant's actions. However, once the Tribunal was seized of the matter then it must deal with it in accordance with the provisions of the Working with Children (Risk Management and Screening) Act 2000 with particular reference to s 228 of that Act. [paras.54-6].

Recently, there was a NSW case reported on by The Sydney Morning Herald in which the report assumed that as the person was permitted to obtain a working with children approval he would obtain approval to be involved in operating a childcare service. This is not necessarily the case as, again, different criteria apply under the two sets of laws. The case heard by the Supreme Court was Children’s Guardian v CHN.